- The number of Bitcoins transferred by miners to exchanges reached a five-month high a day before the approvals.
- Hashprice dropped significantly when Bitcoin prices fell.
Bitcoin [BTC] corrected sharply two days after the spot ETFs were officially approved for trading, falling as much as 7% from the levels observed immediately after the approval.
According to CoinMarketCap.
Much of the downward pressure was caused by Bitcoin outflows from the Grayscale Bitcoin Trust (GBTC).
Note that the fund was converted into a spot ETF, allowing the redemption of Bitcoins, which were locked up indefinitely in the previous structure.
One cohort of Bitcoin holders may have seen this pullback coming and executed their strategies accordingly.
Did miners see the downturn coming?
According to an analysis company in the chain InHetBlokBitcoin miners’ share of on-chain trading volume rose dramatically in the days leading up to the ETF’s approval.
The volume at the chain was even the highest in more than four years.
Source: IntoTheBlock
Miners exchanged electricity
To verify this data, AMBCrypto turned to another popular on-chain analytics tool, CryptoQuant.
The number of Bitcoins transferred by miners to exchanges reached a five-month high on January 10, a day before the approvals. Moreover, the Miner to Exchange Flow was in an uptrend as of June 7.
Source: CryptoQuant
Was it a wise decision?
Miners, as we all know, regularly liquidate their assets to cover the costs incurred in setting up mining infrastructure. There is a higher chance of these events happening when BTC rises and provides better returns to the miners.
Keep in mind that BTC gained significant bullish momentum before the approvals, rising up to 60% in the previous three months.
Miners may therefore have seen the retracement coming and decided to lock in profits before it was too late.
Hashprice, considered a key barometer of miner profitability, fell significantly as Bitcoin prices fell, AMBCrypto noted using the HashRate Index data.
Read Bitcoin’s [BTC] Price forecast 2023-24
In retrospect, the miners’ choice to liquidate seemed to be a well-considered choice.
Source: Hashrate index
As a result of Bitcoin’s bull rally, miner revenues have soared to levels not seen since the peak of the 2021 bull market. After a prolonged and punishing bear market, miners couldn’t have hoped for anything better.
Source: CryptoQuant